The specification of hematopoietic stem cells (HSCs) in vertebrate embryos is tightly regulated by RNA polymerase II (Pol II)-mediated transcription, which proceeds through multiple steps including initiation/activation, elongation and termination. Understanding the transcriptional mechanism of HSC development provides significant insight into the pathophysiology of human blood diseases. Extensive studies in recent years have demonstrated that transcriptionally engaged Pol II often stalls at 20-40bp downstream of the promoter. This promoter-proximal pausing of Pol II is mediated by pausing factors DSIF and NELF, and requires the positive elongation factor P-TEFb for release. Disrupted pausing-to-elongation switch often causes cell-specific defects, suggesting a role of Pol II pausing in cell fate determination. In line with this, my previous work showed that disruption of Pol II elongation specifically blocked the differentiation of erythroid progenitors in zebrafish embryos. In this proposal, I extend the work to explore how the pausing-to-elongation transition contributes to cell fate determination of HSCs, and which signaling pathways regulate this process. We have used zebrafish genetics to demonstrate that embryonic HSC development requires a well-controlled release of paused Pol II. Loss of pausing factors NELF or DSIF causes significant reduction of HSCs, which can be restored by reducing Pol II elongation via inhibition of P-TEFb activity. Using biochemical approaches, we have identified proteins that potentially facilitate Pol II pausing and elongation by interacting with pausing factors. Furthermore, we have performed a chemical screen to rescue the HSC defect in pausing-deficient zebrafish embryos and identified multiple compounds involved in distinct signaling pathways. Based on these preliminary data, we hypothesize that a tightly controlled Pol II elongation cooperates with transcription regulators and developmental signals to regulate HSC emergence in vertebrate embryos. We will test this hypothesis using an integrated approach with a complementary set of model systems including both zebrafish and human blood cell culture systems. Aim 1 will use a combination of genetic, genomic and biochemical approaches to determine the mechanisms by which Pol II pausing factors regulate HSC formation and identify primary HSC targets regulated by Pol II pausing. In Aim 2, we will identify interacting partners cooperating with DSIF to control Pol II pausing on hematopoietic genes. Aim 3 will focus on the functional interplay between steroid hormone receptor signaling pathways and the Pol II pausing/elongation machinery during HSC development. Completion of these aims will provide important insights for understanding the developmental role of Pol II pausing and also allow us to identify novel regulators of HSC specification. Given the involvement of disregulated transcription elongation in a variety of human disorders, these studies will advance our understanding of its role in the pathogenesis and progression of these maladies and may also identify candidate genes or pathways that can be used for developing novel targeted treatment strategies.